TYMEZYSZYN PTY LTD v MINERAL and CHEMICAL TRADERS PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P 22 December 1994, 22 December 1994 [1994] NSWCA 325 PRACTICE & PROCEDURE — Proposed appeal — allegation of want of procedural fairness — where the parties agreed, and judge told, that only issue of principle to be settled by declaration judge makes final orders — ambiguous correspondence — held: Stay of execution upon terms — payment in part — establishment of fund controlled by solicitors. Kirby J Before me today is an urgent application for relief against execution of certain orders which were made by Santow J. The orders were made pursuant to a judgment given by his Honour and published on 24 November 1994. Thereafter, following further argument, his Honour, on 15 December 1994, made a declaration and orders to give effect to the earlier published reasons. The case is not without its complexity. However, the ultimate issues which, it is said, will be tendered in an intended appeal to this Court are: (1) Whether the declaration of legal right which his Honour made is sustainable in law; and (2) Whether, in the orders which his Honour made, he denied procedural fairness to the claimants. In the nature of these proceedings I am not able (nor would it be right for me) to predetermine the two issues which will, in due course, come to the Court. However, it is appropriate that I should have been taken to those issues so that I could form a view concerning the arguability of the points that will be raised on appeal. Put very shortly, and therefore with some inaccuracy, the claimant asserts that all that was asked of Santow J was that his Honour should determine a prayer for relief which would lead to a declaration. Instead of that, so it is said, his Honour has gone on to make orders which provide for the payments to the opponent of certain share sale proceeds and, in effect, requiring a credit to be allowed by the recipient of that payment (the opponent) for the surplus of the share proceeds after deduction of moneys found to be owing to the opponent. Placed before me today has been certain correspondence. That correspondence demonstrates that the solicitors for the parties were negotiating the basis of the issues which would be tendered at the trial and the way in which they would resolve outstanding questions of quantum in the light of the resolution of those issues. Although I cannot form any final view on the correspondence, and although it is possible that the solicitors were each acting in entire good faith, intending meanings different from that to be derived from the words written, it is enough for me to say, at the moment, that there seems to be an arguable case that the issue, and only issue, which was originally tendered to Santow J was the issue of principle concerning the rights of the parties which would be appropriate to be resolved by declaration. 2 UNREPORTED JUDGMENTS In saying this, I wish to make it clear that I am not pre-determining the matter. It is true, as the opponent has said, that the correspondence is in important respects ambiguous. In the end, it will not be the subjective intentions of the parties or the solicitors that will govern the point. The proceedings were taken back to Santow J and argued at some length. His Honour upheld the contentions of the opponent. I do not have the reasons, if any, which his Honour gave for that course. It would be difficult for this Court to resolve the complaint now made about the suggested departure from procedural fairness unless: (a) transcript were to reveal sufficiently the issues for trial that were tendered to Santow J or (b) some agreed statement of facts could be proffered to the Court which would help it to discern those issues which were for trial or (c) affidavit evidence were provided by those who were in the court when the matter was being litigated and determined. That affidavit evidence now before me, together with the correspondence, would then have to be considered by this Court to resolve the contention, which has been foreshadowed, that a breach of the requirements of procedural fairness has occurred, requiring relief from the Court of Appeal. The issue is one which, of its nature, should be heard by the Court as quickly as possible. I will, in due course, afford a measure of expedition to the hearing of the appeal. When I say "appeal", I really mean "foreshadowed appeal". To this date, as the opponent points out, no notice of appeal has been filed. It was said that there may be a requirement in the liquidator of the first claimant (who is the second claimant), to have the consent of creditors of the first claimant to the commencement of the appeal. Whether that is so or not, it seems to me that it is a matter of justice to the opponent that it should know within seven days whether the claimants are going to appeal or not. Accordingly, in due course, the relief which I will offer will be conditional upon the notice of appeal being filed within that time. The question then arises as to whether some interim relief from the orders of Santow J should be given to relieve the liquidator of the obligation in O3 made by Santow J to pay to the opponent the net share sale proceeds being $689,500. His Honour's order was, by its terms, to take effect seven days from the date of order made on 15 December 1994, ie tomorrow. It seems to me that some measure of relief should be given. However, it should, so far as possible, be given upon terms that are not unduly prejudicial to the opponent. For that reason, it is appropriate to note that, in a letter of 18 April 1994, there was acknowledgment by the solicitors for the claimants that the debt owing, upon one then available view of the case, by the first claimant to the opponent was $182,000. Of course, that acknowledgment was subject to the primary argument which will be advanced on the first issue in the appeal. But it is also a sum which would have accumulated considerable interest since 18 April 1994. It is not possible in the nature of things for the sum stated to be converted into an amount which would now be appropriate upon the footing on which it was advanced on 18 April 1994. However, clearly, it would now be a sum of the order of $250,000 or probably much more. In the notice of motion, the fourth order sought by the claimants related to access to a sum of $492,188.98. This is explained as the sum which is, or was at the time the motion was filed, available to the claimants. It is appropriate to URJYMEZYSZYN PTY LTD v MINERAL and CHEMICAL TRADERS PTY LTD (Kirby J) 3 provide that that sum should remain in a fund to be the first call, as a stake, as it were, pending the outcome of the proceedings in the Court or the making of any further orders in the meantime. Out of that fund, should be paid to the opponent the sum of $250,000 (being the sum of $182,000 with some measure of interest added). That last-mentioned sum will, in due course, have to be repaid to the claimants if, when the appeal is heard, the claimants succeed. There is no reason for me to believe that there would be any difficulty in the opponent's being in a position to repay that sum in that eventuality. The orders which I will provide are designed simply to hold the litigation, in a way appropriate to both parties, until either the appeal is heard and determined or until the Court, in Term, has more time to scrutinise the issues which are relevant to the determination of the stay on an interlocutory bars. In the present state of the Court's business on the fourth day before Christmas, it is simply not possible for more to be done than has been done today. The orders which I therefore make are: (1) Order that the execution of, and all proceedings under, order 3 of the orders of Santow J on 15 December 1994 be stayed until the hearing and determination of the appeal herein or any further or other order of the Court or of a Judge of Appeal; (2) Order that the sum of $492,188.98 be paid into an account to be jointly administered by the solicitor for the claimants and the solicitor for the opponent until further order of the Court or of a Judge of Appeal; (3) It is a further condition of O1 that the account referred to in O2 should be opened on 22 or 23 December 1994 and the sum referred should be paid into that account by 4.00 pm on Friday, 23 December 1994; (4) Upon such payment into the account as referred to in order 3, there should be paid out to the opponent a sum of $250,000, such sum to be held by the opponent pending final orders in the appeal and to be subject to any final orders of the Court, or any further orders of the Court or of a Judge of Appeal; (5) Order that the costs of the motion for the stay be costs in the appeal; (6) Order expedition of the hearing of the appeal, category C, to the intention that the appeal will be heard within three months of the commencement of the new Term in 1995; (7) Order written submissions; (8) Dispense with the Rules of Court relating to the preparation of appeal books, to the intent that a completion of relevant papers, with index, will be prepared by the appellants and served upon the respondent by 30 January 1995; (9) It is a further condition of order 1 that the appellant will, within 7 days of this day, file and serve on the solicitors for the proposed respondent a notice of appeal; and (10) Grant liberty to either party to apply to relist these proceedings in the Vacation or after the commencement of the new Term upon two days' notice to the other. The intent of the last two orders is that, in the event that the notice of appeal is not filed within seven days, the matter will be brought back to me or whoever is then the Vacation Judge, so that the foregoing orders can be vacated and consideration given to lifting the stay now granted on the terms stated. UNREPORTED JUDGMENTS Counsel for the Appellant: DL Williams Counsel for the Respondent: SA Gregory Solicitors for the Appellant: Gordon & Johnson Solicitors Solicitors for the Respondent: Brian Robinson & Co